Diminished value occurs when a car is wrecked and repaired; naturally, a car that has seen even one accident has less market value than a car that has seen none. Although insurance companies may cover the cost of repairs, they usually won't offer to compensate you for the diminution in your vehicle's value.
Negotiating compensation to offset diminished value will likely be an uphill battle, but the financial reward is worth the time and effort. Reviewing how to calculate diminished value and how to negotiate for it will help you get more on your depreciation of value claim.
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Don't Wait to Act
If you car is damaged by another driver, you have a chance of collecting compensation from the offending driver's insurance company to offset diminished value. Contact your insurance company and the other driver's insurance company directly after the accident. File your claim for repairs as you would normally.
For the most part, you won't be able to make a diminished value claim with your own insurance company or for an accident that was your own fault. Most states impose a statute of limitations on property damage claims, usually of about three years. Act within this time frame to negotiate a diminished value claim.
Get One or More Appraisals
It will help your case if you can get you car appraised after the damage is repaired, especially by a licensed appraiser, recommends Time magazine's NextAdvisor website. Knowing the exact current value of the vehicle will help you when making a diminished value claim, according to the John Foy law firm.
Compare the appraiser's price with the current value of the car according to a source such as the Kelley Blue Book or NADA Used Car Guide. Because of the repaired damage, your car's actual value will probably be significantly lower than the list price.
Read the Policy Carefully
Make sure you are familiar with the policy language of the offender's insurance company. Every insurance company is different. Many insurers use an endorsement from the Insurance Services Office to exempt them from paying out diminished value claims. Knowing the company's stance on diminished value will help you counter the adjuster's potential arguments.
Contact the insurance agent who sold you your policy. Relay your findings about your car's potential and actual value. Some agents, especially independent agents, will help you fight for a diminished value check. In the best case scenario, your agent will negotiate the compensation for you.
Decide On Your Request Number
When you write your letter requesting your diminished value amount, be prepared to support your reasoning. Explain your car's current diminished value as compared to its book value and request the difference as compensation for the diminution.
Clearly state that this diminution was not your fault, but the fault of the driver covered by the insurance company in question. Follow your letter with a phone call to the adjuster. Restate your points orally. Make the adjuster justify her reasoning if she offers you a lower figure. Take notes on her points and address each one, explaining why you feel you're entitled to the full compensation for diminished value. Accent your argument with sparing emotional examples such as any medical problems you suffered as a result of the accident.
Make a Counter Offer
If your request is denied, follow up with another phone call. Propose a figure in between your original figure and the lower figure if the adjuster tries to talk you down again. In most cases, you'll meet in the middle. Get in touch with your state insurance commissioner if the insurance company refuses to budge. Explain the situation to the commissioner's office and ask if they will contact the insurance company on your behalf.
Get Expert Help
You can enlist the help of a diminished value claims authority. For a fee, these companies specialize in getting you your diminished value check. Once you hand the case over to a claims authority, they'll do the negotiating. If necessary, take the offending driver's insurance company to small claims court as a last resort, using your expert as a witness.vMake sure you can prove the worth of your vehicle before the accident compared to the worth of you vehicle after the accident.